William Noble has never seen anything like it. Noble, who works at Oscar & Friends in Sydney’s Surry Hills, says the bookshop sold out of E. L. James’s debut novel, Fifty Shades of Grey, over a week ago.

“It has just spread by word of mouth and through social media and in no time it has sold more than Harry Potter and The Da Vinci Code," he says. “It’s unbelievable."

Like many other bookshops across the English-speaking world, Oscar & Friends was last weekend awaiting a fresh delivery of delayed copies from publisher Vintage Books, owned by Bertelsmann’s Random House, to satisfy a conga line of decidedly curious customers.

Fifty Shades’ author, a likeable 49- year-old former BBC television production manager and mother of two from London, is now the fastest-selling author in history. Sales of her trilogy – Fifty Shades of Grey, Fifty Shades Darker and Fifty Shades Freed – have reached 1.18 million in Australia, of which almost a third were e-books. It has sold 26 million copies across the US, Canada, Britain, Australia, New Zealand, India and South Africa, according to Nielsen BookScan, since its release in April and May.

Self-published Australian author Greg Johnston has ‘upped the erotica’ in his latest novel
Photo: Rob Homer

The title’s success, and the remarkable story of how it came to be, point to the global potency of social media, a new world of e-books and self-publishing (that doesn’t necessarily bode well for publishing’s bottom line), and the fact that, once in a while, a novel on women’s sexuality, from Lady Chatterley’s Lover to a trashy Jackie Collins bonk-buster, captures the Zeitgeist.

Derided by some critics as “mommy porn", Fifty Shades traces the erotic, bondage-fuelled relationship between virginal US college graduate Anastasia Steele and young business mogul Christian Grey.

It’s low on artistic merit and its popularity has depressed many literature scholars, but it has nevertheless thrilled millions of women, many of whom say it has opened their eyes to the possibility of a more playful and exciting sex life in their intimate relationships. Some are heralding it as the short-term saviour of the book industry in Australia, which has been hit by the closure of REDgroup, the strong dollar, poor consumer sentiment, falling print sales and the rise of cheap e-books.

“The most exciting thing about this phenomenon is that it proves books aren’t dead," says Shona Martyn, publishing director of Harper Collins Australia.

But, he stresses, “One or two weeks is too short term to report on from a big picture point of view."

Indeed, the volume of books sold here fell 7.1 per cent, to 60.4 million last year, whereas the value of books sold fell almost twice as steeply, by 12.6 per cent, to $1.08 billion.

Andrew Franklin, founder and managing director of Britain-based publishers Profile Books, says this reflects a world where prices are increasingly influenced by huge online bargain retailers such as The Book Depository, acquired by Amazon last year.

“Book-selling is a low margin business with high fixed costs, so when someone comes along and creams off 5 per cent, the business hurts," he says.

Even allowing for the Fifty Shades effect, Nielsen’s figures point to another 10 per cent fall in the value of books sold here this year. Thus publishers are studying the book’s unique success story as they hunt for the next global blockbuster.

It’s a long bow to mention E. L. James and Charles Dickens in the same sentence but just like the great Victorian novelist, who electrified the public with the 1836 publication of The Pickwick Papers in 19 parts over 20 months, James lured her fans with episodic, cliff-hanger writing and word of mouth.

Her work began as an online episodic work of “fan fiction": an amateur genre in which enthusiasts take a stab at writing their own chapters using the characters in their favourite books. James featured characters named after Stephenie Meyer’s protagonists in the insanely popular Twilight saga, Edward Cullen and Bella Swan (who were re-imagined in the bedroom).

Originally entitled Master of the Universe, it was published on fan websites under the pseudonym “Snowqueens Icedragon".

James later rewrote it as an original piece, stripped it from the websites, and had it released as an e-book and a print-on-demand paperback in May 2011 by The Writer’s Coffee Shop, a tiny virtual publisher based in Australia. Thanks in large part to reviews on blogs, Facebook and Twitter, it catapulted to the number one spot on The New York Times e-book fiction best-seller list, where it was bought by Random House for more than $US1 million, in a life-changing deal for its author, who has since secured a $US5 million movie deal with Universal Pictures and Focus Features.

Random House told The Weekend Financial Review that it had plotted the levels of conversation about the book taking place on social media against its sales curve.

“There is a direct correlation," says Brett Osmond, marketing and publicity director for Random House Australia. “What’s different with this book is that it happened so quickly and around the world at the same time. Because people are more connected, the word of mouth that has always underpinned the sharing of a great book between people is happening now at lightning speed."

Harper Collins’s Martyn agrees: “If you have 500 Facebook friends, and you post on Facebook that you are reading it, and someone else comments, several thousand people are alerted to it at any moment. The number of people who’ve mentioned it within my online social network of women and media is extraordinary."

Martyn readily admits that News Corp-owned Harper Collins is already “trying to ride on the coat-tails" of its rival’s success with Fifty Shades. “We very quickly signed a Tasmanian author, Indigo Bloome, whom I hadn’t heard of at the beginning of May," she says. “If I could sell 10 per cent of Fifty Shades with Indigo, I would be very happy."

Bloome’s Destined to Play, “a bondage/S&M novel", is selling one e-book for every print edition.

The discreet digital format is ideal for indulging in guilty pleasures such as erotica, says Maree McCaskill, chief executive of the Australian Publishers Association.

“There are a lot of women who would consider themselves to be liberated and passionate about equality who would be embarrassed to be seen reading romance," McCaskill says.

“The nice thing about e-books is that they are almost giving a legitimacy to that. It’s like adult blokes reading comics such as Manga. For some reason, it’s not OK."

Self-published Australian author Greg Johnston has “upped the erotica" in his latest novel The Skin of Water to tap into the latest trend. Johnston, aka G.S. Johnston, is typical of thousands of amateur writers using Amazon’s self-publishing tools to find an audience. It took him just two hours to upload the novel.

A pharmacist-turned-book-keeper, Johnston never published in print himself because “the prospect of having 2000 copies in the living room and no way to distribute them beyond Sydney was too daunting". Now most of his sales are in the US. But, at US99¢ to $US2.99 per e-book, he makes trifling revenue on sales in their hundreds, especially after Amazon takes two-thirds.

Last week, Pearson, the owner of Penguin Books, bought one of the largest grassroots publishers, Author Solutions, for £74 million ($112 million), in an effort to spot the next E. L. James. Publishers are also using e-books to push their back catalogue cheaply.

“The point with e-books is that people buy more books. If you have a great device, it’s very tempting on Saturday night to buy all the backlist if you’ve discovered an author," Martyn says. “We are going a long way back with our backlist, putting them up as e-books. These are books that would otherwise be a challenge keeping in print, and a big challenge for booksellers keeping them on the shelf with minimal turnover."

But the e-book also represents a massive threat to the way the industry has traditionally operated. Profile’s Franklin describes it as “globalisation in an extreme form". “Anyone can shop anywhere at the click of a button and have it delivered instantly from New Jersey or India or wherever it’s stored electronically," he says.

Low prices in the e-book market are partly due to the legions of authors self-publishing books and pricing at US99¢.

“A lot of rubbish is talked about the possibilities for authors of self-published works," Franklin says. “But it’s like winning the lottery. You never read about the 13 million people who bought a ticket and didn’t win."

The biggest battleground is now in e-books – as shown by a landmark case in the US in which Apple and five publishers have been taken to court by the Department of Justice for allegedly colluding to set prices for e-books on the iPad. For now, Amazon, which prices e-books for its market-leading Kindle device itself (at a loss), remains the global power, as with online print sales.

Experts say it is hard to split out print margins from e-books but warn that, because prices for both are tumbling, the total industry is shrinking regardless of the Fifty Shades-fuelled volume spike.

And as e-books gradually supplant print (e-book revenue for US publishers doubled to more than $US2 billion in 2011), publishers must face new rivals in their fight to protect sliding revenues and remain the gatekeepers of quality.

“The annual turnover of Penguin, one of the world’s biggest publishers, is about 1.5 per cent of Amazon’s market value," Franklin says. “There are four internet giants – Apple, Amazon, Facebook and Google – all vying to get in on the action, and the little publishers risk becoming like infantrymen caught between the tanks rolling out on the plains."